Compass on an old map

Resolving mass disputes in Europe: Conference insights

A conference organised by Erasmus University, Rotterdam, on 27 June 2012, looked into emerging European responses to the challenge of mass disputes that are currently confronting EU member states. The Swiss Re-sponsored event brought together over 40 experts.

Challenge of multiple small claims

Court systems across Europe are challenged by multiple small claims: Courts in many countries are already clogged up by pending cases, the small value of individual cases often appears disproportionate to the costs of court litigation, and finding an efficient method to group small claims in view of an efficient resolution is a complex task. Comparative research has therefore looked into ways how small claims could be dealt with in an alternative, more efficient, cheaper and faster way.

Consumer Alternative Dispute Resolution

The key is consumer Alternative Dispute Resolution – or CADR (PDF, 205KB). The EU has proposed draft legislation on Alternative Dispute Resolution (ADR) and online dispute resolution that aims at implementing such an alternative, efficient resolution method. Academics at the conference agreed that this is the right way to go because CADR takes pressure off the court systems, helps the public sector save money, and effectively enables redress for cases involving small amounts.

Professor Christopher Hodges of the Center for Socio-Legal Studies at Oxford University and co-author of a recent book on consumer ADR has conducted extensive research into CADR mechanisms across 10 EU member states. Based on this research, he strongly supports the CADR approach. At the conference, Hodges called for filling in the gaps in terms of providing efficient solutions by looking at best practice and concrete case studies across Europe for working CADR mechanisms. He also called on the industries concerned to support the establishment of working consumer ADR mechanisms – including their funding, as an efficient way to deal with small claims. Hodges said that, far from working "against the industry" his research had shown that both parties – consumers and industry – can in fact benefit substantially from the approach.

The reinsurance perspective on consumer ADR

The heterogeneous civil justice landscape across Europe presents a challenge to the re/insurance industry. On the one hand, collective redress legislation still expands, with Malta being the most recent EU member to enact such new legislation in June 2012. On the other hand, it is obvious that alternative avenues to dispute resolution contribute to reduce insurance transaction costs and are thus viewed positively by the industry.

Robert W. Hammesfahr, Executive Claims Counsel, Swiss Re, said that "if comparative research can help determine which instruments are most efficient and effective in providing redress under the above conditions, then politicians and legislators can work towards regulatory solutions that build on these insights. That is why Swiss Re supports such research and the dissemination of insights through conferences such as these".

Class action reform in the US picking up speed

While developments in Europe are currently at an important crossroads between firmly rooting ADR mechanisms to deal with mass claims and still enacting traditional legislation for court-based resolution, encouraging developments were reported from the US. Professor Deborah Hensler of Stanford University reported that class action reform in the US is picking up speed.  In particular, over the past years, the Supreme Court has issued a number of rulings that narrow the scope for mass tort.

Towards a balanced system of redress in Europe

There was a broad consensus among conference participants that an ADR-based approach would be more efficient and less disruptive for most situations in Europe than litigation alternatives, and that it could indeed deliver satisfactory redress solutions for claimants and defendants. Comparative research has contributed eminently to a better understanding of the key success criteria for working ADR mechanisms. Eventually, insights from European research might even feed back into the US justice system: Public policy advocates could use these insights to improve the US legal liability system, which clearly has weaknesses, is too costly and inefficient.

Published 13 July 2012

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